October 2, 2023


Move Step By Step

US Greenback Index – The Market’s Compass Technical View

3 min read

On Tuesday morning I Tweeted a chart and my ideas on the technical situation of the DXY. That Day by day Chart and my feedback are posted under.

“Final Friday the DXY impulsively fell again under the Cloud and the Median Line (gold dotted line) of the shorter-term bearish Schiff Modified Pitchfork (gold P1 by P3). On Monday costs fell and closed under the decrease Parallel (stable purple line) of the longer-term bullish Schiff Modified Pitchfork (purple P1 by P3) and right this moment, costs violated TDST Help on the 102 stage. MACD has rolled over by its sign line after failing to retake the bottom in constructive and the Fisher Remodel can also be monitoring decrease beneath its sign line. The load of the adverse proof and the violations of a number of help ranges have tremendously elevated the chances that key help at 101.80 will probably be examined. Provided that help on the Decrease Parallel of the gold Schiff Modified Pitchfork holds continued promoting strain could have me re-think my technical thesis.”

As will be seen from the up to date chart posted under, after a quick pause the selloff reignited to the down facet and the index broke the 2 ranges of help talked about in my feedback from Tuesday. Throughout Wednesday’s buying and selling session the index rapidly violated potential help on the Decrease Parallel (stable gold line) of the Schiff Modified Pitchfork (gold P1 by P3) and later within the session the DXY plowed by potential worth help on the 100.80 stage which had held worth pullbacks in early February and April. Because the saying goes “ leap up and down on a entice door sufficient instances, it can splinter and provides manner”. The selloff has continued this AM and the index is shifting farther away from damaged worth help which now, following the rule of polarity, ought to function as resistance (100.80) in any over bought bounce which is able to inevitably unfold however there may be little proof that dump has reached it’s nadir. Each MACD and the Fisher Remodel definitely don’t recommend that the present leg decrease has run its course.

We’re at present watching the 4-Hour chart carefully for any trace that an oversold bounce could possibly be creating however as will be seen within the chart under (utilizing the identical ancillary technical indicators that I used on the Day by day Chart above) there may be nary a touch at a flip regardless of the oversold situation.

The longer-term Weekly Chart under doesn’t add any consolation to anybody lugging lengthy positions within the “inexperienced again”. After breaking Weekly Cloud help early this yr the DXY didn’t retake the bottom contained in the Cloud and was capped since early June by the Higher Warning Line (purple dashed line UWL) of the Schiff Modified Pitchfork (P1 by P3) and the Kijun Plot (inexperienced line) for the reason that center of final month. MACD is rolling over by it sign line once more because it tracks in adverse territory and the Fisher Remodel is again under its sign line. The one technical characteristic that may assist gradual the drop is potential help on the Higher Parallel (stable purple line) of the Schiff Modified Pitchfork.

In conclusion this nonetheless a dwell technical grenade and it could be folly to by one’s self on high of it. Not but, till it on the very least it’s defused.

For readers who’re unfamiliar with the technical phrases or instruments referred to within the feedback on the short-term technical situation of the DXY can avail themselves of a quick tutorial titled, Instruments of Technical Evaluation or the Three-Half Pitchfork Papers that’s posted on The Markets Compass web site…


Charts are courtesy of Optuma.

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